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An Abridged History 

WITH ILLUSTRATIONS 
OF THE OPERATIONS OF THE 


Yukon Gold Company 


JUNE • 1911 



Hydrauuckino on American IIii.i 


















To the Stockholders of the Yukon Gold Company. 

Gentlemen: 

The nature of the work undertaken by the company 
in which you are interested is so little understood, and the 
conditions governing mining in the far north are so unusual 
that the Directors have decided to place before you an 
illustrated and descriptive story of the progress of the 
operations in addition to the annual report which has 
recently been mailed you. 

We trust this effort to inform you fully as to the 
objects and accomplishments of the company will meet 
with your approval. 

Very truly yours, 

S. R. GUGGENHEIM, 

President. 

New York, June 1st, 1911. 












AateO* 

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YUKON 


GOLD 


C O M P A N \ 



N order to understand the nature of the undertaking of the Yukon 
Gold Company it is necessary to gather some idea of the history of 
the Klondike Gold Fields, the nature of the deposits and the condi¬ 
tions surrounding mining as carried on in this district. The Depart¬ 
ment of the Interior of Canada has recently published a work 
entitled “ The Yukon Territory—Its History and Resources,” which 
gives a very comprehensive review of the discovery of gold in the Yukon and the world 
famous rush of adventurers from every class of society to the Klondike Fields in 1898 
and 1899. This work, however, is not known to the general public, so that something 
of the character of the country, as well as tin* deposits which are now being mined, is 
shown in the accompanying photographs. 


The Klondike District, so-called, lies in the Canadian portion of the Alaska Penin¬ 
sula, known as the Yukon Territory. It is reached by steamer to Skagway, in south¬ 
eastern Alaska, thence by railway over the White Pass on the famous White Pass «& 
Yukon Route, and thence by steamers owned by the same company down the upper 
waters of the Yukon through Lake Lebarge to the City of Dawson, which is the busi¬ 
ness center of the Yukon. The distance by water front Seattle or Vancouver to Skag¬ 
way is 900 miles; tin* distance by rail 110 miles to Whitehorse, which is the start¬ 
ing point of navigation, and from Whitehorse to Dawson 135 miles by river steamers, 
similar in size and design to the steamers operated on the Ohio or on the more west¬ 
ern rivers of the United States. 

Dawson is also reached by water during the summer season by larger river steam¬ 
ers, of which the packets “ Sarah ” and “ Susie” are fair examples, which run from St. 
Michaels, a seaport opposite from Nome on Behring Sea, up the Yukon, supplying, 
as well, the other prominent mining localities of Alaska situated on or near the Yukon 
River. 

The mention of Alaska or the Yukon usually conveys the impression of extreme cold 
and hardships, such as have been pictured in story and photograph ever since the days 
of the rush to the Klondike and to Nome. As a matter of fact, the Klondike District, 
as well as the other mining camps in the interior of Alaska, enjoys a summer season 
that is unsurpassed. The days are comfortably warm and pleasant, bright and sun¬ 
shiny, for the most part, with intermittent showers and occasional thunder storms. 
During all of June and the greater part of July there is no darkness, as the City of 
Dawson lies so near the Arctic Circle that daylight lasts practically twenty-four hours 
during the latter part of May, June, July and into early August. The conditions for 
out-of-door work are excellent. The cool, bracing air, bright nights, a plentitude of 


5 





YUKON GOLD COMPANY 


fresh vegetables and all the necessaries of life, as well as most of the luxuries, make 
for health and energy in all classes of the inhabitants. The working men are, as a rule, 
strong, healthy and energetic. They represent, for the most part, men who have worked 
their own claims and who have survived the struggle and hardships of the early days. 
It is often remarked by the tourist that Dawson has the best of everything in the way 
of food supplies, and this is indeed the case, as the cost of transportation represents 
such a large proportion of the cost of supplies that only the best of everything is 
ordered and shipped into this country. 

Now, as to the gravel deposits from which came the wealth of gold which has 
made the Klondike famous. The first discoveries were made in the creek bottoms 
where the seasoned prospector always conducts his first explorations. It was not until 
the work in the creek bottoms was well under way, and the creek claims were produc¬ 
ing their millions, that the discovery was made that high upon the hills a deposit of 
gravel existed which, in a great many places, was as rich in gold as the creek beds 
themselves. The discovery of these higher level deposits, now known as the “ White 
Channel,” is generally attributed to a novice, who knew no better than to climb a hill 
to locate a placer claim. As the discoveries followed one after another on the various 
hills, it was soon proven that a large channel of gravel existed following the general 
course of the present streams, but high above them at elevations ranging from 150 feet 
at the upper end of the hill deposit to 300 feet and over at the lower end. Thou¬ 
sands of miners were soon swarming on the hills, sinking shafts, driving tunnels and 
taking out the gold-bearing material as rapidly as their co-laborers were in the creek 
bottoms. 

The early seekers of wealth in the Klondike who were fortunate enough to stake 
or acquire a claim, found, on sinking their prospect shafts, a condition which was 
strange to them, particularly if they came from the more temperate zones. The gravel 
in its undisturbed condition was found to be frozen solid and covered by a bed of 
“ Muck,” so-called, which is decomposed organic matter in a frozen state. On top of 
the muck was a layer of heavy Arctic moss, which served as a perfect insulator and 
preserver of the frozen condition existing underneath. It was commonly supposed 
that this condition was due to the extreme cold of the winter when the thermometer 
registers 25° to 60° below zero for weeks at a time. That this is not the case has been 
proven by changes which have taken place since the gold-bearing gravels were first dis¬ 
covered. The frozen condition in reality dates back to the ice age, and when once the 
gravels are exposed to the action of the sun or the flow of streams, the frozen condi¬ 
tion disappears and does not return with the cold of the succeeding winter season. In 
the gradual recession of the line of frost which once reached to the center of our mid¬ 
dle western states, the northern countries have been the last to yield and with the 


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YUKON GOLD COMPANY 


slow yielding a heavy covering of moss sprung up which has preserved the condition 
which existed centuries ago. The fact of the gravel being frozen so that it would stand 
without timbering was a god-seml to the early miners who were without knowledge 
of timbering methods. It has been, however, one of the most serious obstacles which 
the more recent large scale operators have had to overcome. 

In the few years following the discovery of the Klondike and the rush of gold 
seekers, tin* district produced an amount of gold which made its name a synonym for 
wealth. The great extent of the gold-bearing creeks and the number of claims wherein 
local concentration had taken place gave a large range to the operations and brought 
great wealth to the individuals who were fortunate enough to have staked or purchased 
a well located claim. The production bounded up to over $39,000,000.00 in 1901, and 
reached a total estimated at about $80,000,000.00 by the year 1905. At this time, and 
previous to 1905, the camp began to decline. The extremely rich and highly profitable 
claims had been, for the most part, worked out and the ground remaining, in many 
cases, was not sufficiently rich to pay to work by the expensive methods in nse. The 
experiences of several years had cheapened the cost of working the creek claims by the 
introduction of steam scrapers, self-dumping buckets and other appliances to minimize 
the amount of pick and shovel work, but the cost still remained high. The hill de¬ 
posits had been tunnelled and gophered until the majority of their wealth lying near 
the bedrock had been extracted. The early miners, and particularly those familiar 
with hydraulicking, had been struck with the favorable conditions for working the hill 
deposits by this method. By the seasons of 1902 and 1903 several plants had been 
installed, and some of them were in successful operation. It was found that the gravels 
being frozen did not interfere when once a face of sufficient length was opened to the 
sun and the warm summer air. The principal detriment to successful hydraulic min¬ 
ing was the scanty and erratic nature of the water supply. After the thaw in the 
spring the normal summer condition is one of dryness relieved by occasional heavy 
showers. These showers occasionally permit of some hydraulicking to be done in mid¬ 
summer, but for the most part the work was confined to the early spring and the fall 
after the rains began. The result was, that while the hydraulic method, as a method, 
was proven to be a success for handling the ground, it was expensive, and in some 
cases unsuccessful, due to the intermittent character of the water supply. 

Along the creeks the old methods, with the improvements suggested by experience, 
still prevailed. Dredging had been tried in a small way, but was not looked upon 
with great favor, although the first large dredge installed on the Klondike Valley was 
successful from the beginning. The principal factors making for high cost were the 
small size of the claims, individual ownership, intermittent and scanty water supply, 
high cost of fuel, labor and supplies. 


7 




YUKON GOLD COMPANY 


Many schemes had been promulgated to overcome the water difficulties and to 
cheapen the cost of power, but up to the time the Yukon Gold Company entered the 
field the efforts to secure Government assistance or financial aid for such enterprises 
had come to naught. 

After a study of the conditions existing in the district in 1905 a new scheme was 
evolved, which contemplated the purchase and ownership of a large number of claims 
so situated as to make continuous groups on all the principal productive creeks, to in¬ 
troduce a permanent water supply, electric power system, mechanical excavators, and 
machinery for working the gravels on a large scale which was to be followed later by 
hydraulicking the hill gravels or “ White Channel ” deposits as rapidly as tailing 
ground was provided. The carrying out of this scheme resulted in the formation of 
the Yukon Gold Company. 

A water system for the Klondike had been talked of for years. Preliminary sur¬ 
veys had been made for diverting water from the Klondike river, but the expense of the 
undertaking made it practically prohibitive The most feasible water supply was from 
the main right fork of the Twelve-mile River, known as the “ Tombstone,” and this 
meant the construction of a water conduit, consisting of flume, ditch, and pipe line, of 
over (14 miles in length before the gravel deposits were reached. The photographs give 
a fair idea of the magnitude of this undertaking. When it is realized that this work 
was carried on thousands of miles from the source of supply of the raw materials and 
through a country which was an absolute wilderness, some idea may be had of the many 
difficulties which had to be met and overcome. 

After the purchase of the properties now owned by tlie Yukon Gold Company had 
been completed and the equipment plans had been made, something over three years 
were required to complete the project. Practically the entire construction work was 
finished in three seasons of four months each, or a little over one year of actual con¬ 
struction work. In this period of time the entire equipment was completed and put in 
operation, consisting of: 

1. Main ditch system 64.2 miles of main line, composed of 15 miles of flume, 
37 miles of ditch, and 12 miles of pipe line, crossing five depressions and deliver¬ 
ing water to the Lower Bonanza hills under a head of 500 feet. The capacity of the 
main ditch is 5,000 miners inches, and some idea of its size may he had from the 
photographs. The Bonanza Extension, completed in 1909, is approximately 6 miles 
in length, has a 3,000 miners inch capacity and crosses three depressions. The 
total length of the ditch system and extensions is 72.2 miles. 

2. Hydro-electric plant operated by water from the Little Twelve-mile river 
carried through five miles of flume and delivered to the plant under 650 feet net 


8 




YUKON 


GOLD 


C O M P A N Y 


effective head. The installation consists of three 050 K.W. generators, direct con¬ 
nected to three water wheels of the impulse type. The main transmission line is 
30 miles in length, operating at 35,000 volts, with 18.2 miles of extensions and 
secondaries. 


3. Installation of seven dredges with their thawing plants and auxiliaries, 
three of which are of the five-foot close connected type, and four of the seven-foot 
close connected. The seven dredges have an actual capacity of over 3,500,000 
cubic yards in a season. 

4. Three mechanical elevators with a capacity of 2,000 cubic yards per day 
each, complete with pipe lines, transformers, motors, and pumping equipment. 

5. Storage dam on Upper Bonanza 08 feet high at the crest, 205 feet wide at 
the base, and 405 feet long at the top, with impounding capacity of 54,000,000 
gallons. 


6. Equipment for the hydraulic mines, including auxiliary pipe lines from 
the main water system, gates, giants, tunnels, cuts and sluice ways. The hydraulic 
plants when in full operation will have a capacity of over 1,500,000 cubic yards 
per annum. 

In addition to the items enumerated above there are shops, warehouses, warm and 
cold storage, bunk houses for the men, stables, camps, telephone system, and all of the 
equipment necessary for a mining operation of this size. 


All of the construction work outlined above was carried on in the face of most 
unusual difficulties. Roads had to be built to handle the heavy pipe lines and all the 
supplies necessary for the small army of men engaged on the construction work. The 
major portion of the freighting was done in the winter, using heavy sleds of the Michigan 
logging type over roads kept smooth and glassy by snow plow and water sled. Over 
30,000 tons of freight were hauled over the winter roads alone. Many novel engin¬ 
eering problems were met with, due to the frozen condition of a large portion of the 
country through which the water system was constructed. In some cases it was neces- 
sarv to go through over 00 feet of frozen muck before solid foundation could be found 
to support the pipe lines. The “ Klondike Syphon "—the huge pipe line which car¬ 
ries the water across the valley of the Klondike—was in itself alone an undertaking 
of the first magnitude. < )n account of the length and size of this line and the high pres¬ 
sure involved, as well as the nature of the country to be crossed, the successful comple¬ 
tion of this portion of the system in the time allowed may justly be called an engin¬ 
eering triumph. 


9 




YUKON GOLD COMPANY 


Mr. T. A. Rickard thus describes his impression of the construction of the water 
system in his interesting book, “Through the Yukon and Alaska”:— 

“ The country traversed by this ditch is a rolling woodland indented by the 
alluvial fiats of the Klondike, the Twelve-mile, and other streams flowing into the 
Yukon River. As seen from a height, the wilderness stretches unbroken from the 
meandering shimmer of the Klondike, enclosed within high banks on which white 
scars mark bench-diggings, to the Ogilvie range, where, far to the north, the snow 
still lingers in token of the gift of water that shall enable men to win the gold from 
the deposits of gravel strewing the tortuous valleys. The engineer who first planned 
the line of flume, ditch and pipe had that kind of constructive imagination which is 
the creative force behind all engineering work. He imagined the deed done, and 
then he calmly began to calculate how to accomplish it. 

“ In preparing to build the ditch, the first step was to place a sawmill on the 
Twelve-mile River, and thus to obtain the lumber for construction. Then an 
electric generating plant was erected, and the wires were strung on poles for 36 
miles, transmitting power from the Little Twelve-mile River to Bonanza Creek. 

While this was being done, surveys for the ditch were hastened. As soon as the 
surveys were completed, the right-of-way was cleared. The small growth of forest 
was removed, and the moss stripped from the frozen ground for a width of one 
chain (22 yards). Then steam-shovels were put to work, and while they were 
digging the ditch, the sawmill on the Twelve-mile yielded the lumber needed for 
the construction of the flume and for other purposes. Seven million feet (board 
measure) of lumber was cut; this depleted the small forest in the vicinity, but it 
proved sufficient. 

“ Without the steam-shovel it would have been hardly possible to dig the ditch 
in an economical manner, for manual labor at $4.00 per day, plus board at $2.00. 
or a total of $6.00 per day, is a costly instrument of engineering. Six shovels were 
employed. These made the cut. which was then beveled by hand, to be followed by 
the laying of moss on the sloping sides, with a little fine dirt as a finishing touch. 

“ Roads of the corduroy type have been constructed, moss being laid on the 
poles and dirt on the moss. The trails traverse the brush in straight lines. Horses 
and men. steam and muscle, have fought against the wilderness and subdued it. 

The big ditch looks like a Panama canal, and the steam-shovels groaning and dig¬ 
ging in the deep cuts recall pictures of Culebra. Many of the laborers had worked 
on the Isthmian canal, and assuredly the young engineers were as proud of the 
work they were accomplishing as if it were a national or even an international 
enterprise.” 

The operations of the Yukon Gold Company in the Klondike Fields cover such a 
wide range that a detailed description would require too much space to be attempted 
here. The photographs will serve to illustrate individual operations, hut no view or 
panorama can indicate the extent of the mining operation or illustrate its numerous 
phases. Perhaps the most interesting feature of the entire operation is the develop¬ 
ment of dredging in the creek bottoms in its application to the frozen gravels of the 
North. Dredging for gold as it is carried on in California and other temperate cli¬ 
mates has been pictured and described until it is fairly well understood by those 
conversant with modern mining methods. In adapting this method to the creek gravels 
in the Yukon many changes had to he made in the methods and machinery to make 
the operation successful. First of all the dredges had to be strongly built in order to 
withstand the severe service of digging the broken schist which composes the bedrock, 
and coming into contact with frozen gravel which is almost as impenetrable as gran¬ 
ite. The most serious problem was to overcome the frozen condition so that the 


10 




Y U K O N 


GOLD 


C O M P A N Y 


material could lx* handled as readily as similar ground in California or elsewhere. The 
first efforts to accomplish this were in the line of removing the top covering of moss and 
muck by ground sluicing. This was found adequate in some cases, but was proven 
to be too slow and expensive, as well as of doubtful result where the gravels were 
deep or the top covering unusually thick. Due to the drifting and open cut operations 
which had been carried on for years before the dredge was introduced a large portion 
of the ground was thrown open so that it thawed naturally and presents no obstacle 
to dredging. The thawing of the frozen portions was accomplished by successive mod¬ 
ifications of tbe method of thawing by steam which had been in use in the country for 
some years. A detailed description of the thawing plants will not be attempted here. 
It is sufficient to say that by increasing the size of the boiler plants and their thawing 
equipment and by continual experiments with the spacing and material of which the 
points were composed, it has been found possible to thaw the gravels at a reasonable 
cost and make the whole of the creek beds workable as one deposit. 

With the first view of the dredge at work one is immediately impressed with the 
size and power of the machines and with the apparent simplicity of the operation. 
While the operation appears simple, the modern gold dredge combines a number of ele¬ 
ments which make it an efficient machine, and the accomplishment of its various func¬ 
tions involves a most careful adjustment of a number of independent machines, all 
more or less complicated. The dredge has not only to excavate the material, to wash 
it, and extract the gold, but finally to dispose of the tailings. The dredges take every¬ 
thing in their path, tailings from former operations, as well as virgin ground, and 
leave behind them regular and orderly rows of tailings piled high above the level of 
the surrounding ground. 

The hydraulic work is equally interesting and impressive. The streams of water 
driven from the nozzles with a pressure of upward of 100 pounds to the inch strike 
the banks with a roar that can be heard for miles. Here again skilled engineering has 
to be brought into play to determine the depth and location of cuts and tunnels, and 
the carrying power and cutting action of the water, with a view to obtaining the high¬ 
est possible duty. The same methods that were used to develop the California hydrau¬ 
lic mines were put into use in the Yukon. The gravel, with its high percentage of 
quartz sand, washes easily, and the frozen ground offers no hindrance to the opera¬ 
tion. It is difficult to appreciate when watching the hydraulic giants at work, that the 
water which is tearing down the hill banks has traveled over hills and valleys a dis¬ 
tance of nearly 70 miles. 

The operation should be seen in order to appreciate its scope and magnitude, but 
it is hoped that the photographs will give some idea of this enterprise during its con¬ 
struction period and in its present state of steady operation. 


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White Pass & Yukon Route Steamer on the Yukon 
River, near Selwyn. 


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One of the White Pass & Yukon Route Steamers pass¬ 
ing through Five Finger Rapids on the Yukon River. 
























































































































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Section of 
completed 
flume. 


Ogilvie Range, near 
the intake, showing 
source of water sup¬ 
ply and contour of 
country traversed by 
ditch system. 

























































Putting in underpinning in early spring. 










umber distributed along right-of-way, ready for flume 
construction. 

Note Tombstone Mountain in background. 






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section of completed ditch, excavated by 
steam shovel. 


' ievv of Tombstone River, near the Intake 
of Main Ditch. 


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Wood stave pipe crossing on Bonanza Division. 










































Assembling stave pipe on Lepine Ridge. The depres¬ 
sion at this point is crossed by a pipe line of approxi¬ 
mately three miles in length. 


■■■■■■ 


n of pipe line 

*uwn uritr is unuer a pressure oi approximately 500 
ounds to the square inch. 































Portion of high pressure pipe line crossing 
Klondike Valley, showing man-hole and 
expansion joint. 


Portion of the Bonanza Division, showing pipe line crossing 
Adams Creek. 


■■■■ 


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Mechanical elevator ready for operation, 
electrically operated. Gold-bearing gr; 
to a sump by water under pressure; < 
buckets to flume in background. 




Dredges Nos. 1 and 2 under construction. 


Dredge construction at mouth of Bonanza Creek,— 
two dredges building in the same pit. Shows one 
dredge complete to the superstructure and the hull 
of the other under way. Note hill deposits and 
hydraulic tailings in the background. 











































































































































































Machine shops and warehouses. This view is taken looking up Bonanza from the 
mouth, and shows the dredge tailings, with two dredges in the distance. 
















Press of Ferris <5° Leach 
27 South Seventh St. 
Philadelphia 







































































